Farm payments in a ‘no deal’ Brexit

UK farmers receive around €4 billion per year under the EU’s Common Agricultural Policy (CAP). In any Brexit scenario, the UK will leave the CAP when it leaves the EU. But what happens to farm payments in the event of a no deal Brexit?

This insight sets out the Government’s plans to continue to pay farmers after exit day and the legal measures to enable this to happen.

Farm payments after Brexit

When the UK leaves the EU, whether under a
withdrawal agreement or not, it will leave the CAP. The CAP only applies to EU
Member States.

The UK Government has said the UK will leave the EU on 31 October 2019. The Government has committed to retaining current overall level of cash support for farmers until the end of this Parliament, expected in 2022. This commitment covers all funding provided for farm support under the current CAP and applies to the whole UK. CAP payments to UK farmers are currently paid under two pillars. Pillar 1 accounts for the majority of payments and are mainly direct payments to farms. Pillar 2 relates to agricultural support and rural development funding.

This commitment applies whether the UK exits the EU
with a deal or not. Levels of funding after 2022 and details of how funds might
be apportioned have not been set out.

Framework for farm payments after Brexit

A new framework and legislative basis will be needed
for farm support after Brexit and preparation for this is in train across the
UK.

Secondary legislation

The Agriculture Bill is awaiting its Report stage. If the Bill has not received Royal Assent at the time of Brexit, the provisions in it to enable Ministers to continue to make farm support payments would not be in place.

However, the Government has introduced secondary legislation to allow continuation of payments. Defra has laid a series of Statutory Instruments (SI’s) under the European Union (Withdrawal) Act 2018 to make EU retained law operable in relation to agriculture, including measures on farm payments.

No deal technical notices

If the UK leaves the EU on 31 October 2019 with no agreement in place, eligible beneficiaries will continue to receive payments under the terms of the UK government’s funding guarantee.

Defra and the devolved administrations are preparing domestic legislation (under the Withdrawal Act) to ensure we have the ability in law to continue operation of payments in a ‘no deal’ scenario. This legislation preserves the EU law as it currently stands, and ‘fixes’ the legislation so that it is operable once we’ve left the EU.

The domestic legislation will require beneficiaries to conform to the same standards as they do currently, in order to receive payments. This will include on-site inspections to UK farms receiving payments, which will continue as normal.

All of these rules and processes will remain the same until Defra and the devolved administrations introduce new agriculture policies, either through the Agriculture Bill, or an Agriculture Bill in one or more of the devolved parliaments.

The government has pledged to continue to commit the same cash total in funds for farm support until the end of this parliament, expected in 2022: this includes all funding provided for farm support under both Pillar 1 and Pillar 2 of the current CAP. This commitment applies to the whole UK.

Farmers representatives have called for clarity on
long term funding levels beyond 2022. The Tenant Farmers Association and the
Country Land and Business Association, have called for a delay to any changes
in payment schemes until the “economic realities of operating outside the EU
are clearer”.